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[Federal Register Volume 63, Number 127 (Thursday, July 2, 1998)]
[Notices]
[Pages 36202-36205]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-17675]

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DEPARTMENT OF AGRICULTURE

Food and Nutrition Service

National School Lunch, Special Milk, and School Breakfast 
Programs; National Average Payments/Maximum Reimbursement Rates

AGENCY: Food and Nutrition Service, USDA.

ACTION: Notice.

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SUMMARY: This Notice announces the annual adjustments to: (1) the 
``national average payments, ``the amount of money the Federal 
Government provides States for lunches, meal supplements and breakfasts 
served to children participating in the National School Lunch and 
School Breakfast Programs; (2) the ``maximum reimbursement rates,'' the 
maximum per lunch rate from Federal funds that a State can provide a 
school food authority for lunches served to children participating in 
the National School Lunch Program; and (3) the rate of reimbursement 
for a half-pint of milk served to nonneedy children in a school or 
institution which participates in the Special Milk Program for 
Children. The payments and rates are prescribed on an annual basis each 
July. The annual payments and rates adjustments for the National School 
Lunch and School Breakfast Programs reflect changes in the Food Away 
From Home series of the Consumer Price Index for All Urban Consumers. 
The annual rate adjustment for the Special Milk Program reflects 
changes in the Producer Price Index for Fluid Milk Products. These 
payments and rates are in effect from July 1, 1998 through June 30, 
1999.

EFFECTIVE DATE: July 1, 1998.

FOR FURTHER INFORMATION CONTACT: Robert M. Eadie, Chief, Policy and 
Program Development Branch, Child Nutrition Division, FNS, USDA, 
Alexandria, Virginia 22302, (703) 305-2620.

SUPPLEMENTARY INFORMATION: This action is not a rule as defined by the 
Regulatory Flexibility Act (5 U.S.C. 601-612) and thus is exempt from 
the provisions of that Act.
    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
3507), no new recordkeeping or reporting requirements have been 
included that are subject to approval from the Office of Management and 
Budget.
    This action is exempted from review by the Office of Management and 
Budget under Executive Order 12866.
    National School Lunch, School Breakfast and Special Milk Programs 
are listed in the Catalog of Federal Domestic Assistance under No. 
10.553, No. 10.555 and No. 10.556, respectively, and are subject to the 
provisions of Executive Order 12372, which requires intergovernmental 
consultation with State and local officials. (See 7 CFR Part 3015, 
Subpart V, and the final rule related notice published at 48 FR 29114, 
June 24, 1983.)

Background

Special Milk Program for Children

    Pursuant to section 3 of the Child Nutrition Act of 1966, as 
amended (42 U.S.C. 1772), the Department announces the rate of 
reimbursement for a half-pint of milk served to nonneedy children in a 
school or institution which participates in the Special Milk Program 
for Children. This rate is adjusted annually to reflect changes in the 
Producer Price Index for Fluid Milk Products (Code 0231), published by 
the Bureau of Labor Statistics of the Department of Labor.
    For the period July 1, 1998 to June 30, 1999, the rate of 
reimbursement for a half-pint of milk served to a nonneedy child in a 
school or institution which participates in the Special Milk Program is 
13.00 cents. This reflects an increase of 4.65 percent in the Producer 
Price Index for Fluid Milk Products (Code 0231) from May 1997 to May 
1998 (from a level of 135.4 in May 1997 to 141.7 in May 1998).
    As a reminder, schools or institutions with pricing programs which 
elect to serve milk free to eligible children continue to receive the 
average cost of a half-pint of milk (the total cost of all milk 
purchased during the claim period divided by the total number of 
purchased half-pints) for each half-pint served to an eligible child.

National School Lunch and School Breakfast Programs

    Pursuant to Sections 11 and 17A of the National School Lunch Act, 
(42 U.S.C. 1759a and 1766a), and Section 4 of the Child Nutrition Act 
of 1966, (42 U.S.C. 1773), the Department annually announces the 
adjustments to the National Average Payment Factors and to the maximum 
Federal reimbursement rates for meals and supplements served to 
children participating in the National School Lunch Program. 
Adjustments are prescribed each July 1, based on changes in the Food 
Away From Home series of the Consumer Price Index for All Urban 
Consumers, published by the Bureau of Labor Statistics of the 
Department of Labor. The changes in the national average payment rates 
for schools and residential child care institutions for the period July 
1, 1998 through June 30, 1999 reflect a 2.75 percent increase in the 
Price Index during the 12-month period May 1997 to May 1998 (from a 
level of 156.3 in May 1997 to 160.6 in May 1998).
    Section 704(b) of the Personal Responsibility and Work Opportunity 
Reconciliation Act of 1996, P.L. 104-193, enacted August 22, 1996, 
amended section 11(a)(3)(B) of the National School Lunch Act (42 U.S.C. 
1759a (a)(3)(B)) and changed the method for computing the annual 
adjustments to the national average payment rates for meals and 
supplements served to nonneedy children. Effective July 1, 1997, the 
annual adjustments to the payment rates for paid meals under Section 4 
of the National School Lunch Act (42 U.S.C. 1753), and Section 4 of the 
Child Nutrition Act of 1966 (42 U.S.C. 1773) and paid supplements under 
Section 17(c) of the National School Lunch Act (42 U.S.C. 1766(c)), 
authorized under Section 11 (a)(3)(B) of the National School Lunch Act, 
is rounded down to the nearest whole cent. The annual adjustments to 
the Section 4 payments for free and reduced price meals and to the 
Section 17(c) payments for free and reduced price supplements, were 
unchanged by P.L. 104-193 and are rounded up or down to the nearest 
one-fourth cent.

Lunch Payment Levels

    Section 4 of the National School Lunch Act (42 U.S.C. 1753) 
provides general cash for food assistance payments to States to assist 
schools in purchasing food. The National School Lunch Act provides two 
different Section 4 payment levels for lunches served under the 
National School Lunch Program. The lower payment level applies to 
lunches served by school food authorities in which less than 60 percent 
of the lunches served in the school lunch program during the second 
preceding school year were served free or at a reduced price. The 
higher payment level applies to lunches served by school food 
authorities in which 60 percent or more of the lunches served

[[Page 36203]]

during the second preceding school year were served free or at a 
reduced price.
    To supplement these Section 4 payments, Section 11 of the National 
School Lunch Act provides special cash assistance payments to aid 
schools in providing free and reduced price lunches. The Section 11 
National Average Payment Factor for each reduced price lunch served is 
set at 40 cents less than the factor for each free lunch.
    As authorized under Sections 8 and 11 of the National School Lunch 
Act (42 U.S.C. 1757, 1759a), maximum reimbursement rates for each type 
of lunch are prescribed by the Department in this Notice. These maximum 
rates are to ensure equitable disbursement of Federal funds to school 
food authorities.

Meal Supplement Payments in Afterschool Care Programs

    Section 17A of the National School Lunch Act (42 U.S.C. 1766a) 
authorizes elementary and secondary schools to be reimbursed for meal 
supplements as part of the National School Lunch Program if they meet 
the following requirements: (1) operate school lunch programs under the 
National School Lunch Act; (2) sponsor afterschool care programs; and 
(3) were participating in the Child and Adult Care Food Program as of 
May 15, 1989. The reimbursement rates for supplements served in 
Afterschool Care Programs under the National School Lunch Program are 
the same as the rates for supplements served in centers under the Child 
and Adult Care Food Program.

Breakfast Payment Factors

    Section 4 of the Child Nutrition Act of 1966 (42 U.S.C. 1773) 
establishes National Average Payment Factors for free, reduced price 
and paid breakfasts served under the School Breakfast Program and 
additional payments for free and reduced price breakfasts served in 
schools determined to be in ``severe need'' because they serve a high 
percentage of needy children.

Revised Payments

    The following specific Section 4, Section 11 and Section 17A 
National Average Payment Factors and maximum reimbursement rates for 
lunch, the after-school supplement rates and breakfast rates are in 
effect from July 1, 1998 through June 30, 1999. Due to a higher cost of 
living, the average payments and maximum reimbursements for Alaska and 
Hawaii are higher than those for all other States. The District of 
Columbia, Virgin Islands, Puerto Rico and Guam use the figures 
specified for the contiguous States.

National School Lunch Program Payments

Section 4 National Average Payment Factors

    In school food authorities which served less than 60 percent free 
and reduced price lunches in School Year 1996-97, the payments for 
meals served are: Contiguous States--paid rate--18 cents, free and 
reduced price rate--18.75 cents, maximum rate--26 cents; Alaska--paid 
rate--30 cents, free and reduced price rate--30.25 cents, maximum 
rate--40 cents; Hawaii--paid rate--21 cents, free and reduced price 
rate--21.75 cents, maximum rate--30 cents.
    In school food authorities which served 60 percent or more free and 
reduced price lunches in School Year 1996-97, payments are: Contiguous 
States--paid rate--20 cents, free and reduced price rate--20.75 cents, 
maximum rate--26 cents; Alaska--paid rate--32 cents, free and reduced 
price rate--32.25 cents, maximum rate--40 cents; Hawaii--paid rate--23 
cents, free and reduced price rate--23.75 cents, maximum rate--30 
cents.

Section 11 National Average Payment Factors

    Contiguous States--free lunch--175.50 cents, reduced price lunch--
135.50 cents; Alaska--free lunch--284.25 cents, reduced price lunch--
244.25 cents; Hawaii--free lunch--205.25 cents, reduced price lunch--
165.25 cents.
    Meal Supplements in Afterschool Care Programs--The payments are: 
Contiguous States--free supplement--53.25 cents, reduced price 
supplement--26.75 cents, paid supplement--4 cents; Alaska--free 
supplement--86.25 cents, reduced price supplement--43.25 cents, paid 
supplement--7 cents; Hawaii--free supplement--62.25 cents, reduced 
price supplement--31.25 cents, paid supplement--5 cents.

School Breakfast Program Payments

    For schools ``not in severe need'' the payments are: Contiguous 
States--free breakfast--107.25 cents, reduced price breakfast--77.25 
cents, paid breakfast--20 cents; Alaska--free breakfast--170 cents, 
reduced price breakfast--140 cents, paid breakfast--29 cents; Hawaii--
free breakfast--124.50 cents, reduced price breakfast--94.50 cents, 
paid breakfast--23 cents.
    For schools in ``severe need'' the payments are: Contiguous 
States--free breakfast--127.75 cents, reduced price breakfast--97.75 
cents, paid breakfast--20 cents; Alaska--free breakfast--203 cents, 
reduced price breakfast--173 cents, paid breakfast--29 cents; Hawaii--
free breakfast--148.25 cents, reduced price breakfast--118.25 cents, 
paid breakfast--23 cents.

Payment Chart

    The following chart illustrates: the lunch National Average Payment 
Factors with the Sections 4 and 11 already combined to indicate the per 
meal amount; the maximum lunch reimbursement rates; the reimbursement 
rates for meal supplements served in afterschool care programs; the 
breakfast National Average Payment Factors including ``severe need'' 
schools; and the milk reimbursement rate. All amounts are expressed in 
dollars or fractions thereof. The payment factors and reimbursement 
rates used for the District of Columbia, Virgin Islands, Puerto Rico 
and Guam are those specified for the contiguous States.

BILLING CODE 3410-30-U

[[Page 36204]]

[GRAPHIC] [TIFF OMITTED] TN02JY98.024

BILLING CODE 3410-30-C

[[Page 36205]]

    Authority: Sections 4, 8, 11 and 17A of the National School 
Lunch Act, as amended, (42 U.S.C. 1753, 1757, 1759a, 1766a) and 
sections 3 and 4(b) of the Child Nutrition Act, as amended, (42 
U.S.C. 1772 and 42 U.S.C. 1773(b)).

    Dated: June 26, 1998.
George A. Braley,
Acting Administrator.
[FR Doc. 98-17675 Filed 7-1-98; 8:45 am]
BILLING CODE 3410-30-U
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